How to Qualify for Commercial Equipment Finance in Australia

A Step-by-Step Guide for Businesses

Securing commercial equipment finance can transform your business by providing access to essential assets without draining cash reserves. Whether you need machinery for construction, vehicles for transport or fit-outs for hospitality, understanding the qualification process is key.

This guide outlines the core eligibility criteria, required documents, tips to boost your approval chances and common pitfalls to avoid. With the right preparation, most Australian businesses can qualify quickly.

What Is Commercial Equipment Finance?

Commercial equipment finance is a secured loan or lease that funds the purchase of business assets like plants, machinery, vehicles or technology. The asset itself acts as security, leading to lower rates than unsecured loans.

Popular structures include chattel mortgages (full ownership from day one) and hire purchase agreements. In Australia, over $20 billion in equipment is financed annually, making it a cornerstone of business growth.

Core Eligibility Criteria

Lenders assess risk based on your business stability and ability to repay. Here are the standard requirements:

Active Australian Business Number (ABN)

Your ABN must be registered and trading for at least 12 months. Some specialist lenders accept six months for start-ups, while major banks often require two years.

GST Registration

Preferred but not always mandatory. It allows immediate GST refunds under chattel mortgages, improving cash flow.

Business Turnover

Annual revenue under $1 million may attract higher rates. Businesses over $5 million qualify for the lowest. Lenders review your balance sheet for debt-to-income ratios.

Credit History

Directors and guarantors need a clean or manageable credit file. Adverse history is not a deal-breaker with private lenders, but expect higher rates or deposits.

Australian Residency

The business must be tax-resident in Australia, operating fully within the country.

Asset Suitability

The equipment must generate business income. Lenders finance new or used assets up to 12–15 years old for vehicles and 20 years for heavy machinery.

Minimum Loan Amount

Typically $10,000–$20,000. Larger amounts (up to $1 million+) are easier to approve.

Home Ownership

Asset-backed borrowers (homeowners) are seen as lower risk, often securing rates 1–2% lower than renters.

Documents You’ll Need to Provide

Preparation speeds up approvals. Gather these before applying:

Basic Identification

ABN lookup, directors’ driver’s licences and proof of address.

Financial Statements

Last two years’ profit and loss, balance sheets and recent Business Activity Statements (BAS).

Bank Statements

Three–six months to verify cash flow and existing debts.

Equipment Details

Supplier quotes or invoices, including asset description, value and intended use.

Tax Returns

Personal and business returns for directors to assess overall financial health.

Trade References

Optional but helpful for newer businesses – two from suppliers or clients.

For low-doc options (turnover under $1 million), bank statements may suffice instead of full financials.

Interest Rates and What Influences Them

Rates are fixed and secured, typically 7%–20% p.a.

• Major banks: 7%–10% for strong profiles.
• Specialists/private lenders: 10%–20% for higher risk.

Factors lowering your rate:

Longer trading history, higher turnover, strong credit and low loan-to-value ratios (e.g., 10–20% deposit).

Homeowners often save 1–2% due to perceived lower risk.

Tax Benefits That Boost Qualification

Qualifying for finance is easier when you highlight tax perks, as they improve repayment capacity.

Instant Asset Write-Off

For businesses with turnover under $10 million, claim full deductions on assets up to $20,000 (GST-exclusive) purchased and used by 30 June 2026.

Interest Deductibility

Loan interest is 100% tax-deductible, reducing your effective cost.

Depreciation

Accelerated claims on pooled assets over $20,000 at 15% first year, then 30%.

Consult your accountant – these can slash taxable income by thousands, making your application more attractive.

Step-by-Step Qualification Process

1. Assess Your Needs Identify the equipment and get quotes. Calculate repayments using online tools.
2. Check Your Eligibility Run a free credit check via Equifax or Illion. Review financials for debt levels.
3. Choose a Structure Chattel mortgage for ownership and GST refunds; hire purchase for spread-out GST.
4. Gather Documents Compile everything digitally for fast submission.
5. Apply via Broker or Direct Brokers access 40+ lenders; direct to banks for simpler cases. Expect 24–48 hour pre-approvals.
6. Undergo Assessment Lenders verify income, credit and asset value. Provide any extras requested.
7. Sign and Settle Pay deposit if needed; lender funds supplier directly. Start repayments.

Tips to Improve Your Approval Chances

Strengthen Your Application

Provide a clear business plan showing how the equipment boosts revenue.

Lower Your Loan-to-Value Ratio

Offer a 10–20% deposit to reduce lender risk and rates.

Use a Broker

Free service comparing lenders – they negotiate better terms and handle paperwork.

Opt for New Equipment

Easier approvals and lower rates than used assets over 10 years old.

Build Credit Early

Pay bills on time; consider a business credit card for history.

Target Specialists

For adverse credit or start-ups, non-bank lenders like Lumi or ScotPac are more flexible.

Common Reasons for Rejection – And How to Avoid Them

Incomplete Documentation

Double-check all financials match your BAS and tax returns.

High Debt Burden

Pay down existing loans; show strong cash flow projections.

Asset Mismatch

Ensure the equipment fits lender guidelines (e.g., no personal-use items).

Short Trading History

Partner with a guarantor or use low-doc options.

Poor Credit

Address issues first; private lenders focus more on future cash flow.

Top Lenders and Their Qualification Focus

Major Banks

Westpac, ANZ, NAB, Commonwealth: Strict on two-year trading, full docs. Best for established businesses.

Specialists

Macquarie, BOQ Specialist: Flexible on used assets, up to $500,000 quickly.

Non-Bank

Lend, Stratton Finance, FlexiCommercial: Start-up friendly, higher rates but faster approvals.

A broker unlocks all, matching your profile perfectly.

Frequently Asked Questions

Can start-ups qualify?

Yes – with six months’ trading, strong projections and a guarantor. Expect 10–15% deposits.

What if I have bad credit?

Private lenders approve 80% of adverse cases, but at 12–18% rates.

Is 100% financing possible?

Common for new equipment; used often needs 10–30% down.

How long does approval take?

24 hours to five days, depending on docs.

Do I need an accountant?

Essential for tax structuring, but not for basic applications.

Final Thoughts

Qualifying for commercial equipment finance in Australia boils down to proving stability, cash flow and purpose. With an active ABN, solid financials and the right lender, approval is straightforward and fast.

This funding preserves capital, unlocks tax savings like the $20,000 instant write-off and fuels growth. Don’t let cash constraints hold you back.

At Finance Finance Finance, our brokers have guided thousands of businesses through qualification since 2015. We compare 40+ lenders, prep your docs and secure the best rates – all at no cost.

Ready to qualify and get funded? Contact us for a free eligibility check today.